Former Realtor Sentenced to 10 Years in Prison for $3.5 Million Central Illinois Investment Fraud Scheme

FOR IMMEDIATE RELEASE

July 20, 2009

Peoria, Ill. – A former real estate broker, Jimmy Dale Lane, was ordered today to report to federal prison on September 1, 2009, to begin serving a 10-year prison sentence. U.S. District Judge Michael M. Mihm today sentenced Lane, 53, of Washington, Illinois, to the statutory maximum sentence for money laundering, 120 months in prison, to be served concurrent with a sentence of 121 months for mail fraud related to the investment fraud scheme. Lane was also ordered to pay restitution in the amount of $2.3 million to victims of the investment fraud.

On February 11, 2009, Lane pled guilty to the scheme which began in 1998. During court proceedings and in court documents, Lane admitted that over a period of approximately 10 years, he solicited investments through various entities, including Lane Investment Group, known as LIG, for real estate developments in western Missouri, and central and southern Illinois. As part of the scheme, Lane offered five-year bond certificates with return rates of 10 - 24 percent. To some investors, Lane represented that the investments were low risk because a real estate lot was collateral. Investor funds were to be used to develop the infrastructure for residential subdivisions, thereby increasing the value of the real estate. Lane admitted he solicited funds before he acquired property for the development which was to be known as Pine Ridge Estates, in Washington, Illinois. Further, unbeknownst to investors, there was an 80% mortgage on the property, which was later foreclosed.

Also, as part of the scheme, Lane offered investments in LIG based on prospectus representations as well as his representations that he was a very successful real estate developer. Investors were told they could cancel their investments and receive reimbursements at a reduced interest rate; however, Lane failed to pay those who wished to opt out as well as those whose principle and interest reached maturity. Instead, investor funds were used for Lane’s personal use, for payments to family members and other business ventures. Despite these failures, Lane continued to solicit investments through a real estate investment trust known as Preferred Properties, Inc. Within months, those funds had been spent on himself, his family and other expenses unrelated to the investment.

After filing bankruptcy in July 2005, Lane solicited investors in yet another new program. Lane represented the program, to obtain new home construction loans, as a way for earlier investors to recoup their investments. Once built, the investor and the defendant would split the profits. Because of his poor credit rating, Lane asked investors to obtain the loans.

Thereafter, Lane admitted he took draws on the loans for work which was not done, used false lien waivers, and directed construction materials to other construction sites. Homes were not completed and investors were required to expend additional funds to complete the construction.

The charges were investigated by the U.S. Postal Inspection Service; the Federal Bureau of Investigation; Internal Revenue Service, Criminal Investigation Division; and the Illinois Secretary of State, Illinois Securities Department . The case was prosecuted by Assistant U.S. Attorney Darilynn J. Knauss.